Triumph of sanity over fear

Brazil has chosen its new president—Dilma Rousseff of the governing Workers’ Party, against the opposition candidate José Serra—and thus has chosen sanity over fear.

Mark Weisbrot discusses the significance of Rousseff’s victory as well as Lula’s mixed record.

in the end, sanity triumphed over fear, as voters proved to have been more convinced by the substantial improvements in their well-being during the Lula years than anything Serra had to offer.It is perhaps not surprising that Serra, an economist, would try to find a way to avoid the most important economic issues that affect the lives of the majority of Brazilians. The economy has performed much better during the Lula years than during the eight years of rule by Serra’s Social Democratic party (PSDB): per capita income grew by 23% from 2002 to 2010, as opposed to just 3.5% for 1994 to 2002. Measured unemployment is now at a record low of 6.2%.

Perhaps even more importantly, the majority of Brazilians enjoyed substantial gains: the minimum wage, adjusted for inflation, grew by about 65% during Lula’s presidency. This is more than three times the increase during the prior eight years (that is, the presidency of Fernando Henrique Cardoso, of Serra’s party). This affects not only minimum-wage workers, but tens of millions of others whose income is tied to the minimum wage. . .

On the down side, the negative campaigning prevented the election campaign generally from addressing some of the vital issues of Brazil’s future. Brazil’s financial elite, which dominates the central bank, has an influence on economic policy that is at least as bad – and as powerful – as that of Wall Street in the United States. This is one reason why Brazil, even under Lula, has had, for many years, the highest or near-highest real interest rates in the world. Brazil’s growth performance has still not been on a par with the other “Bric” countries (Russia, India, China), and the country will have to move away from some of the neoliberal policies of previous governments in order to achieve its potential.

The election in Brazil has significance far beyond Brazil, including the fact that, in contrast to the expected results of tomorrow’s mid-term elections in the United States, the election of Rousseff represents a rejection of fear in favor of sanity.